Of Patels and Reservation: a light hearted look
All of us who belong to the non entrepreneur groups ( we Bengalis are prominent among them ) look upon the Gujaratis, more specifically Patels as the epitome of all that is the business spirit of a community that has by all accounts taken charge of entrepreneurship In India. They are the ultimate risk takers, hard workers, ready to nose around for profits everywhere and have a proud record of successful business not just in this country but all over the world. It is well known that half of all motels in the USA are Patel owned. See here.
Wellspun City, Gujarat
Which is why a recent report in Economic Times which reported a militant movement that has suddenly taken wing in Gujarat shocked me to the gills. The Patels, we are told, want reservations as members of the Other Backward Classes ( OBC) group. They want what? Reservations in Government jobs? That too in Gujarat, the shining Gujarat that has broken all bounds of growth in the past 15 years? The Gujarat where all corporates take wing whenever the likes of Mamata Bannerjee do bad things to them? Where there is a new major industry being set up every other week? That Gujarat?
What could be the matter?
To me this raises
some disturbing questions.
The first one. Is a government job so profitable that even
people who have business in their genes want to do that in exclusion to what they
are supposed to excel in? Or is it that they will do the business that they
have always planned, but the government job is a fall back pension plan (after
all you don’t need to actually work
do you?)
The second question that comes up is "Is the Gujarat growth
story all that it is cracked up to be?" Maybe the sceptics who complained that
the profit was being skimmed by the corporates while the common people had worsening
social indicator outcomes are correct? What if this is just a manifestation of
the difficulties that ordinary people are facing? Maybe they were not just the anti
Hindu lefties that we thought them to be ?
The final question that I want answered is this. In recent
years there has been a huge influx of Bengali youth to Gujarat for jobs which
are not available in their native climes. Have these Bongs infected the good
Patels? Is it another case of what Bengal thinks today (government jobs are
best) India, in this case, Gujarat, thinks tomorrow?
Take your pick!
Comments
Yes, Gujarat has produced entrepreneurs. Yes, they are pragmatic and have managed to create the best infrastructure in the country. Companies set up factories here because the connectivity is good, Government officials are effective (corruption exists but it comes with an assurance of more professional support) and electricity is not a problem.
If we look at the size of the factories that are located in Gujarat, we'd find that the majority of them are in the MSME category. And then we should read this article- http://indianexpress.com/article/business/economy/gujarat-clocks-over-48000-sick-msme-units-in-2014/.
Yes, many of the small scale factories are in trouble. The cost of manufacturing in India is higher than that in China, which does things on a much, much larger scale. Certain products (like Dyes and Pigments) are almost completely dominated by the chinese imports and there's no way to stop it. The customer cares about the price and the chinese will always be there to compete because of their volumes. What is happening is that some businesses are moving away from manufacturing-and venturing into trading of the products. This may not directly affect the GDP, but it will affect the employment prospects of the youth (especially). A factory producing a chemical used in paints might employ 500 people. A trader selling paints will employ 50.
What has happened is gradually becoming clear. Businesses are facing a lot of competition from the Chinese imports. Getting a job is becoming more difficult because almost everyone is a graduate now. Corporates are intent on maximizing profits by automating production processes and hiring highly paid engineers to manage them. Running a small shop (the simplest option) is no longer an option because organized retail and online shopping sites have decimated the margins. In this scenario, what does a 24-30 year old person do for a living? He needs something that can give him a decent salary and save his livelihood from volatility. A Government job is the closest match. Now 50% of the jobs are reserved on the basis of caste. What do you do if you're not considered to be a part of that privileged group? You try to join that group.
Hardik Patel made a shrewd move by targeting the right sentiment at the right time. He's perhaps capitalizing on the emotions of the group now for fulfilling his political aspirations-but he has helped to bring to the surface a problem that was getting brushed under the expensive carpets that greet guests at the investor summits.
The moral of the story is - When you can't beat them, join them.